Tech Support Scammers Fined in US, Jailed in UK

Ohio Attorney General Mike DeWine and the Federal Trade Commission (FTC) announced Monday that operators of a nationwide computer repair scam have been banned from the tech support business as part of settlements with the FTC and Ohio.

Commonly known as the 'tech support scam', repair fraud has become a global problem. A Microsoft survey with details published in October 2017 suggests that 2 out of 3 people have experienced a tech support scam in the last 12 months.

One in five U.S. respondents to this survey reported losing money to the scammers. "Since 2014," wrote Microsoft Assistant General Counsel Courtney Gregoire in an associated blog, "Microsoft has supported law enforcement agencies across the country who took legal action against known fraudsters responsible for approximately $165 million in consumer losses."

The scam attempts to engage victims in a telephone discussion about their computer, and to persuade them that it has problems that can be fixed for a price. In the current case, the scammers first caused pop-ups to appear on their victims' computers resembling security alerts from well-known technology companies. These are usually Apple and Microsoft.

ESET senior research fellow David Harley (who has been monitoring support scams for many years), calls them "opportunistic SEO-friendly ads claiming to be from real vendor helplines."

The false alerts claimed the computers had been breached by a virus or hacker, and urged the 'victims' to call a toll-free number for assistance. Telemarketers then took over and asked for remote access to the 'infected' computer. They then ran 'diagnostic tests' that falsely claimed to find major problems that could be solved through the purchase of a one-time fix or a long-term service plan that would cost hundreds of dollars.

The FTC filed a complaint in Ohio last year as part of an ongoing campaign called Operation Tech Trap. The defendants were Repair All PC LLC; Pro PC Repair LLC; I Fix PC LLC; WebTech World LLC; Online Assist LLC; Datadeck LLC; I Fix PC (also doing business as Techers 247, I Fix PC, and I Fix PC 247); Jessica Marie Serrano; Dishant Khanna; Mohit Malik; Romil Bhatia; Lalit Chadha; and Roopkala Chadha.

The settlements announced Monday resolve the case. The defendants have been barred from offering tech support products or services, whether genuine or fraudulent, and misrepresenting their affiliation with another company. Perhaps more to the point, the settlements also impose a $12.4 million judgement that will be suspended upon payment by the defendants of a total of $122,376.

"This scheme affected people in Ohio and across the country, and we were pleased to work with the Federal Trade Commission to shut it down," said Attorney General DeWine. "Scams regularly cross state and national borders, so this kind of collaboration is an important part of protecting consumers."

In the UK, the National Trading Standards (NTS) announced on Friday that Narendra Harilal Vadgama (age 56) has been sentenced to 12 months in prison (reduced to 9 months on a guilty plea) for a very similar offense. "Mr Vadgama's victims were targeted through cold-calling or with computer pop-ups," said the NTS. "In many of the cold-calls Mr Vadgama's company gained the trust of their victims by falsely claiming to be computer technicians from companies like Microsoft. They then claimed that the victim's computer had been compromised or their routers had been hacked or infected and needed urgent action to stop the victim's computer or data from being compromised."

Vadgama was discovered following a joint investigation by NTS, Microsoft, the UK's National Fraud Intelligence Bureau and Leicestershire police. "This case demonstrates precisely why public-private partnership is critical to tackling modern day fraud operating at global scale," commented the City of London Police's Commander Dave Clark (the national coordinator for economic crime). "Partnerships like this are increasingly being used and should send a warning to criminals that the UK is increasingly becoming a hostile environment to commit fraud in."

Whether individual successes against the support tech criminals in both the U.S. and the UK will have any great effect on the overall crime rate is a different matter. "How effective the FTC's ruling will be in practice is another question," Harley told SecurityWeek. "I suspect that it will do little to discourage the many other companies executing similar spams (though we can always hope). While there may be individual call-center operatives who don't realize that they're executing a scam -- they're not always the sharpest knives in the drawer -- I imagine that the companies who employ them are usually fully cognizant from day one. Even if the FTC sanctions are sufficiently scary to stop them operating in the same way, I suspect that there's little to stop them cashing out and/or regrouping."

Ultimately, the best defense against tech support scams is heightened user awareness. Reputable firms like Apple and Microsoft and (especially in the UK, BT) simply do not cold call their customers. Interestingly, the Microsoft survey figures suggest that aged consumers are not, as one might expect, either the prime targets or main victims. According to Microsoft, 50% of its respondents "who continued with a fraudulent interaction" were millennials aged between 18 and 34. Only 17% were over 55.

Security professionals should make sure that both their children and their parents are aware of this scam.

[Update] The FTC has just announced that it is sending 3,791 checks averaging around $176 (a total of $668,000) to victims of a tech support scam action that was settled in May 2017. Part of the settlement included turning over financial assets to the FTC. "These are legitimate checks," says the announcement. "The FTC never requires consumers to pay money or provide account information to cash a refund check."

Interestingly, the FTC also issued a warning today on a different scam: an email claiming to be Secretary Tillerson announcing a $1.8million government refund, provided the recipient sends him $320 plus personal information.

FTC law enforcement actions provided more than $6.4 billion dollars in refunds to consumers between July 2016 and June 2017.

Kevin Townsend is a Senior Contributor at SecurityWeek. He has been writing about high tech issues since before the birth of Microsoft. For the last 15 years he has specialized in information security; and has had many thousands of articles published in dozens of different magazines – from The Times and the Financial Times to current and long-gone computer magazines.